ABSTRACT Transdifferentiation has become a common claim for somatic stem cells, yet how this is accomplished has not been well investigated. Although much evidence exists that somatic stem cells can change their protein phenotype, it is not clear what mechanisms are involved, and whether the stem cells actually change their function and maintain this change. To investigate the mechanisms of transdifferentiation, we propose to use two cell types with distinct characteristics and functions: the epidermal stem cell (EpiSC) and the B lymphocyte. EpiSCs express the intermediate filaments keratins 5 and 14 and form sheets of cells connected by adherens and desmosomal junctions. B lymphocytes, in contrast, do not express keratin intermediate filaments. They express a defined set of cell surface proteins with well-studied kinetics of expression. In order for a B lymphocyte to produce a specific immunoglobulin, it must incur a permanent genetic change. This involves deletion and rearrangement of VDJ segments in their immunoglobulin heavy chain locus. This rearrangement is mediated by the RAG1 and RAG2 recombinase enzymes, and by the Pax5-encoded transcription factor BSAP (B cell specific activator protein). EpiSCs do not exhibit VDJ rearrangement; express the RAG1, RAG2, or Pax5 gene; or produce immunoglobulin. Our preliminary data suggest that EpiSCs can be directed to express the B lymphocyte cell markers and genes, and show rearrangement of VDJ segments. We hypothesize that EpiSCs are developmentally flexible, i.e. that they can be directed to produce cells of alternate lineages. To test this hypothesis, in Aim 1, we propose to direct EpiSCs (marked with [unreadable]gal) to transdifferentiate into B lymphocytes. We will verify that individual EpiSCs did transdifferentiate by detection of B Cell surface markers and recombinase enzyme genes, and by PCR analysis for VDJ rearrangement in [unreadable]gal- expressing cells. Since permanency of the transdifferentiation event is important for future therapy, we will test whether or not EpiSCs that alter their cell lineage remain transdifferentiated when removed from the B cell inductive environment. In Aim 2, we will attempt to determine the mechanism(s) by which individual EpiSCs transdifferentiate. Our preliminary findings indicate that EpiSCs require direct contact with the S17 stromal cells in order to transdifferentiate. We hypothesize that S17 cells induce EpiSCs to alter their lineage via receptor- ligand interaction(s). We will test this hypothesis by examining the membranes of EpiSCs, before and during co-culture with S17 cells, for the expression of candidate receptor-ligand pairs. Since the skin is the largest organ with potentially the greatest number of stem cells, understanding the mechanism behind transdifferentiation of these cells is a step toward their use in tissue regeneration.